Archives for May 26, 2018

Key Highlights ETH price settled below the $600 support level with negative signs against the US Dollar. There is a crucial contracting triangle forming with current support at $580 on the 4-hours chart of ETH/USD (data feed via Kraken). The pair may well make the next move either above $600 or below $580 in the near term.

Ethereum price is struggling to recover versus the US Dollar and Bitcoin. ETH/USD is now approaching a crucial break, possibly higher if buyers gain control.

Ethereum Price Trend

There were heavy losses in ETH price from the $724 swing high this past week against the US Dollar. The price failed to hold a major support area near $637 and declined sharply. The decline was such that the price broke the $600 and $575 support levels. A low was formed at $543 from where the price started a minor upside correction above $560.

It recovered and moved above the 23.6% Fib retracement level of the last decline from the $724 high to $543 low. However, the upside move was capped by the $610-612 resistance zone. Moreover, the 38.2% Fib retracement level of the last decline from the $724 high to $543 low acted as a strong barrier for buyers and prevented gains. At the moment, it seems like there is a crucial contracting triangle forming with current support at $580 on the 4-hours chart of ETH/USD. The pair seems to be trading in a range above $580 and is preparing for the next move.

The above chart indicates that the price is currently under slight bearish pressure. If it fails to hold the $580 and $575 support levels, there may be sharp declines back towards $540. On the flip side, a break above the $600 level may open the doors for push towards the $637 pivot level.

Key Highlights

ETH price settled below the $600 support level with negative signs against the US Dollar.

There is a crucial contracting triangle forming with current support at $580 on the 4-hours chart of ETH/USD (data feed via Kraken).

The pair may well make the next move either above $600 or below $580 in the near term.

Ethereum price is struggling to recover versus the US Dollar and Bitcoin. ETH/USD is now approaching a crucial break, possibly higher if buyers gain control.

Ethereum Price Trend

There were heavy losses in ETH price from the $724 swing high this past week against the US Dollar. The price failed to hold a major support area near $637 and declined sharply. The decline was such that the price broke the $600 and $575 support levels. A low was formed at $543 from where the price started a minor upside correction above $560.

It recovered and moved above the 23.6% Fib retracement level of the last decline from the $724 high to $543 low. However, the upside move was capped by the $610-612 resistance zone. Moreover, the 38.2% Fib retracement level of the last decline from the $724 high to $543 low acted as a strong barrier for buyers and prevented gains. At the moment, it seems like there is a crucial contracting triangle forming with current support at $580 on the 4-hours chart of ETH/USD. The pair seems to be trading in a range above $580 and is preparing for the next move.

The above chart indicates that the price is currently under slight bearish pressure. If it fails to hold the $580 and $575 support levels, there may be sharp declines back towards $540. On the flip side, a break above the $600 level may open the doors for push towards the $637 pivot level.

Key Points Bitcoin cash price remained under pressure and declined below the $1,000 support against the US Dollar. There is a monster bearish trend line in place with resistance near $1,060 on the 4-hours chart of the BCH/USD pair (data feed from Kraken). The pair is likely to decline further and it could even break the last swing low of $948 in the near term.

Bitcoin cash price is in a bearish trend below $1,080 against the US Dollar. BCH/USD remains at a risk of more declines towards the $920 and $850 levels.

Bitcoin Cash Price Decline

This past week, there were sharp declines from the $1,100 swing high in bitcoin cash price against the US Dollar. The price declined and broke a few important support levels such as $1,050 and $1,000. It traded towards the $950 level before starting an upside correction. A low was formed at $948 and the price corrected above the 23.6% Fib retracement level of the last decline from the $1,322 high to $948 low.

However, the upside move was capped by the $1,050 resistance. It also failed to test and break the 38.2% Fib retracement level of the last decline from the $1,322 high to $948 low. BCH price is declining once again and it seems like it could retest the $948 low in the short term. A break below $948 could open the doors for a test of the $920 and $900 support levels. To the topside, there is a monster bearish trend line in place with resistance near $1,060 on the 4-hours chart of the BCH/USD pair.

Looking at the chart, the price is facing a tough challenge on the upside near $1,060 and the trend line. Above this, the last swing high of $1.150 is the next major hurdle for buyers.

Looking at the technical indicators:

4-hours MACD – The MACD for BCH/USD is mostly negative in the bearish zone.

Key Points

Bitcoin cash price remained under pressure and declined below the $1,000 support against the US Dollar.

There is a monster bearish trend line in place with resistance near $1,060 on the 4-hours chart of the BCH/USD pair (data feed from Kraken).

The pair is likely to decline further and it could even break the last swing low of $948 in the near term.

Bitcoin cash price is in a bearish trend below $1,080 against the US Dollar. BCH/USD remains at a risk of more declines towards the $920 and $850 levels.

Bitcoin Cash Price Decline

This past week, there were sharp declines from the $1,100 swing high in bitcoin cash price against the US Dollar. The price declined and broke a few important support levels such as $1,050 and $1,000. It traded towards the $950 level before starting an upside correction. A low was formed at $948 and the price corrected above the 23.6% Fib retracement level of the last decline from the $1,322 high to $948 low.

However, the upside move was capped by the $1,050 resistance. It also failed to test and break the 38.2% Fib retracement level of the last decline from the $1,322 high to $948 low. BCH price is declining once again and it seems like it could retest the $948 low in the short term. A break below $948 could open the doors for a test of the $920 and $900 support levels. To the topside, there is a monster bearish trend line in place with resistance near $1,060 on the 4-hours chart of the BCH/USD pair.

Looking at the chart, the price is facing a tough challenge on the upside near $1,060 and the trend line. Above this, the last swing high of $1.150 is the next major hurdle for buyers.

Looking at the technical indicators:

4-hours MACD – The MACD for BCH/USD is mostly negative in the bearish zone.

While attention is currently focused on the threat that Bitmain’s crypto-mining ASIC chips pose to the security and prices of cryptocurrencies – particularly ether (ETH) and bitcoin (BTC) – an even bigger threat looms not far on the horizon: quantum computers.

An initiative to erect a monument of Satoshi Nakamoto in Ukraine’s capital is gaining momentum and support. The idea is to place the statue right where the red Karelian stone figure of Lenin used to stand, before it was taken down almost five years ago. The project is said to be part of a global campaign to build Satoshi monuments around the world.

A monument of Satoshi Nakamoto may soon greet residents and visitors of Kiev, capital city of Ukraine. The project to erect a statue of the unknown creator of bitcoin and the blockchain technology has been gaining support. The plan is to place the figure on the intersection of Kiev’s main “Khreshchatyk” Street and the “Taras Shevchenko” Boulevard.

The targeted spot is not a random place. Several years ago it was occupied by the monument of Vladimir Lenin, the communist founder and leader of the Soviet Union. His statue was toppled down and destroyed by angry protesters in December, 2013. The act was one of the memorable events during the Euromaidan demonstrations which lead to dramatic political changes in Ukraine.

The empty space, opposite the “Bessarabsky” Market, has since turned into a site for political expression and artwork. At the height of the civil unrest in February 2014, opposition activists put a golden toilet on the pedestal as a symbol of the rampant corruption in their troubled and divided country. One of the numerous accusations against the then president Viktor Yanukovych was that he had gold toilets installed in a country estate near Kiev.

The people behind the project plan to initially design a virtual Satoshi monument. The digital statue will be visible through a mobile app, when the smartphone is turned towards the pedestal, as reported by the outlet Delo. The Ukrainian VR/AR and robotics company Raccoon World has promised to materialize the virtual reality concept.

The organizers also intend to file a petition with the Kyiv City State Administration and apply for permission to build a real, physical monument. They plan to raise the necessary means through a crowdfunding campaign. In the meantime, the virtual statue project has been supported by the Ukrainian entrepreneur Alexander Soroka, founder of the investment platform Startup Network, who has already donated 1 bitcoin (BTC).

A Global Initiative, a Blockchain Republic

According to local media reports, the installation of the statue in Kiev is part of a global initiative to erect Satoshi monuments around the world and create a so called “Blockchain Republic.” In case the city authorities reject the petition, the authors of the project say they’ll be looking for another location to place the symbolic figure.

Not long ago, a similar initiative was realized in Slovenia, as news.Bitcoin.comreported. In March, the city of Kranj inaugurated a monument dedicated to bitcoin and blockchain – the first in the world, according to local authorities. The installation is in the form of a large bitcoin logo placed in the middle of a roundabout. The crypto theme of the monument has been chosen by the citizens of Kranj.

Would you support a project to build a bitcoin monument or a Satoshi statue in your city? Let us know in the comments section below.

Images courtesy of Shutterstock, Delo.ua.

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South Africa is the latest country to try and classify cryptocurrencies as it looks to regulate the industry and generate income tax. According to the country’s Central Bank, digital currencies such as bitcoin (BTC) are mere “cyber-tokens” that don’t meet the criteria to be categorized as money.

South African Cryptocurrency Classification

According to Francois Groepe, the Reserve Bank Deputy Governor, it is wrong to use the term “cryptocurrency” because virtual currencies do not function as a stable unit of value. The sentiments come at a time when regulators around the world are trying to find ways to regulate digital currencies despite uncertainty as to how best to classify them.

The Reserve Bank of South Africa has formed a FinTech unit that is to carry out a study on cryptocurrencies and try to come up with an appropriate policy framework as well as a regulatory regime. The unit is tasked with the responsibility of establishing whether cryptocurrencies comply with the relevant financial surveillance or exchange-control regulations.

The Central Bank has since issued guidance regarding its position when it comes to the purchase and transfer of cryptocurrencies. According to the regulator, it is wrong for people to buy and sell crypto assets using international exchanges.

In that regard, South Africans are only allowed to buy cryptocurrencies using a discretionary allowance of R1 million ( $14,757.60) or individual foreign investment of R10 Million ( $14,7576.00) per year. However, the use of foreign direct investment from international exchanges is prohibited.

Taxation of Cryptocurrencies

In April 2018, South African Revenue Service (SARS), stated that cryptocurrencies holders would start paying taxes on their holdings. The revenue agency classified digital currencies as “assets of intangible nature” and not money. Given the classification, cryptocurrencies are regarded as having value received or accrued that is subject to taxation.

That said any income received or accumulated from transactions involving virtual currencies is to be taxed under the gross income tax act. The tax policy applies to all cryptocurrency activities right from mining to trading. People who accept crypto payments will also have to declare such holdings as income tax.

South Africa joins growing list of countries that have moved with speed to generate income tax from the growing cryptocurrency industry. Azerbaijan has also announced similar plans to tax revenues accrued from cryptocurrency-related operations.

In the U.S. cryptocurrency transactions are deemed as taxable income and must be reported and paid as income tax or capital gains. Israel is another country mulling over taxing cryptocurrencies related activities.

Even though cryptocurrencies are not legal in India, reports indicate that the country could as well be on its way to levying goods and services associated with digital assets. Reports suggest that the government may impose an 18 percent tax rate on all cryptocurrency trading activities. The Central Board of Indirect Taxes and Customs (CBEC) is reportedly analyzing the measure.

If approved, digital assets in India will be classified as intangible commodities and not currencies or securities. Taxation of cryptocurrencies if approved would mark a turnaround from strict measures that the RBI has announced regarding the legality of cryptocurrencies.

Even as South Africa moves to generate some income from cryptocurrency related activities, other countries on the continent continue to lag behind. Nigeria, for instance, is maintaining a watch and see approach and Governor Godwin Emefiele has warned that that investing in bitcoin is a “gamble.”

Cape Town-based asset management firm Sygnia Ltd. has plans to open a cryptocurrency exchange in Q3 in response to growing interest in cryptocurrencies from investors across the country.

SygniaCoin & Sygnia Cryptocurrency Fund

The exchange will be called SygniaCoin, and will ‘offer investors a secure trading and execution platform backed by an international infrastructure, well-designed custody, and integration with standard savings products,’ the company said yesterday. Sygnia, which has 181 billion rand ($14.5 billion) under management, will also be developing a fund that will permit investors to have access to a range of cryptocurrencies.

“With its fintech focus, Sygnia is well-positioned to become the first major financial services institution to embrace cryptocurrencies and to offer investors a secure trading and execution platform backed by an international infrastructure, well-designed custody and integration with standard savings products.”

Sygnia’s CEO Magda Wierzycka says the firm aims to launch SygniaCoin in the third quarter of 2018.She also said that SygniaCoin’s polices and protocols will be based off the framework developed and utilized by New York State, in attempts to stay on the right side of the law in an ever-changing regulatory climate.

“To ensure the highest levels of integrity and security for clients, we are basing our policies, protocols and processes on existing regulatory framework applicable to cryptocurrency exchanges registered in New York State, USA.”

Wierzycka also noted that the South African Revenue Service (SARS) has already indicated that trading and investing in cryptocurrencies are subject to tax. “We expect further regulatory frameworks to follow,” she added.

On top of the cryptocurrency exchange, the chief executive also said that a range of new products is being designed to cater to the growing needs of retail and institutional investors, including a ‘Sygnia Cryptocurrency Fund’ that will invest in a wide range of cryptocurrencies on behalf of investors.

Project Khoka

In April it was announced that the South African Reserve Bank (SARB) was setting up an investigative unit to monitor developments in the crypto space and help draft future regulations. The unit will be in charge of setting up a proof of concept (PoC) for DLT-based (digital ledger technology-based) interbank clearing and settlement.

Bridget King, Director of Banking Practice at the central bank, says the new unit will be tasked with establishing a self-regulatory approach to the cryptocurrency industry, which would translate into a non-governmental body that aims to prevent risk, while at the same time ensuring that the nascent industry is not over-regulated so it can continue to grow.

To do this, the self-regulatory organization (SRO) would be given the power to publish its own rules, directives, and industry standards.

In January, the SARB established a fintech task force to review the central bank’s position on cryptocurrencies and address regulatory issues like exchange control impacts, monetary policy, and financial stability. The investigative unit Project Khoka is a product of this task force.

On May 25, 2018, South African authorities announced further information of an ongoing investigation of a cryptocurrency scam that has cost investors one billion rands ($80 million).

False Claims and Investor Pitfalls

According to Reuters, South African police mentioned that the investigation involved BTC Global, a cryptocurrency trading company. The cryptocurrency company told clients they would earn substantial returns starting with two percent per day, to 14 percent a week, and eventually 50 percent in a month.

On BTC Global’s website, they stated that they suspended their services. The note on the site lists Steven Twain as the company’s “primary trader.” The website also stated that “until Steven Twain resurfaces or is found there is nothing the admin team can do.” The admin team left Steven’s contact details. While Reuters reached out to Twain’s email address, they received no response.

South African police mentioned that “members of the public are believed to have been targeted as part of the scam and encouraged by agents of BTC Global. Some of the investors got paid in terms of the agreement. However, the payments suddenly stopped.”

More important is the fact that BTC Global had already scammed cryptocurrency investors for more than $50 million by March 2018. Related reports indicated that investors “should have seen that BTC Global was a scam from a mile away” since their unusually high returns are similar to other cryptocurrency scams like Bitconnect.

“This may prove to be the tip of the iceberg with potentially thousands more yet to discover they’ve lost money,” said Yolisa Matakata, a police investigator on the BTC Global Case.

BTC Global Suspends Services

According to the BTC Global website, the “payment info was sent to Steven Twain on Sunday 18 February 2018 as has been done by the admin team each week since last year. Steven did not acknowledge receipt of the information. Steven has not contacted anyone in leadership or admin team. No payments have been made by Steven. The admin team cannot locate him. If anyone has any information on how we can get in contact with him, please get in touch and let us know.”

“We are as shocked and angry as everyone. But we all knew the risks involved in placing funds with Steven. We all became complacent with Steven. And all of us funded him independently.”

A reported 27,000 people were scammed in the heist. While many South Africans were involved, there are reports of other international victims from the United States and Australia. South Africans did, however, lose between 16,000 to 1.4 million rands ($1,280 to $112,000).

Do Your Due Diligence

While many cryptocurrency scams can be very convincing, even novice investors should have been privy to all the red flags on BTC Global’s website. By bringing back an archived version, Mybroadband, a regional technology news site, deconstructed the website. They commented that the extremely high returns, referral commissions, and poor web design were factors retail investors should have noted before investing in the company.

Furthermore, the fact that BTC Global only has one image of their “master trader” drinking a vanilla milkshake is a far cry from any sort of financial legitimacy. There is also very little information online concerning Twain’s background knowledge and trading experience.